Morton's Restaurant Group, Inc. Announces Settlement of Certain Wage and Hour Claims

Morton's Restaurant Group, Inc. (NYSE:MRT) announced today that agreements have been reached to settle certain wage and hour claims against the Company and certain of its subsidiaries. The settlements involve claims filed against the Company as far back as 2003 and cover all of the remaining wage and hour litigation pending against the Company and its subsidiaries, including a nationwide class action filed in 2005. While the Company and its subsidiaries deny allegations underlying the claims, they have agreed to the settlements to avoid additional legal fees, uncertainty surrounding the litigation and the management time that would have been devoted to continued litigation. The settlements are subject to respective arbitrator and court approvals.

The settlements involve the payments of cash over up to a four year period as well as the issuance of preferred stock by the Company. The preferred stock, which will have an aggregate liquidation preference of $6 million, will be issued in connection with the settlement of the nationwide class action within thirty days following court approval of such settlement (but not prior to January 1, 2010) and after two years from the date of its issuance may be converted into up to 1.2 million shares of the Company's common stock (or a lesser number of shares depending on the conversion price computed at the time the court approves the settlement). The Company will have the right to buy back the preferred stock at a price equal to its liquidation preference at any time prior to its conversion.

As a result of the settlements and other labor matters, a one-time charge of approximately $13.4 million pre-tax and approximately $8.5 million after-tax, or approximately $0.53 per diluted share, will be recorded in the fiscal second quarter ended July 5, 2009.

"We believe resolving the wage and hour litigation that has been ongoing for several years is in the best interest of our Company, our shareholders and our employees," said Scott Levin, Senior Vice President and General Counsel, Morton's Restaurant Group, Inc. "Eliminating the distraction and expense of this litigation will allow our management team and employees to focus on what we do best---offering our guests warm, genuine hospitality and 'The Best Steak Anywhere'."

The Company expects to announce its second quarter results in early August 2009.

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